Division of Assets

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In Alberta the law regarding division of assets acquired by married spouses is different than the law that applies to common law spouses. It is possible that in some scenarios the outcome will be the same, but the starting presumptions are quite different.

Married spouses are covered by the Matrimonial Property Act (the "MPA"). The simplest application of the MPA leads to the result that all the property that spouses acquire during the time that they are married is divisible equally. It does not matter who legally owns the property.

However, there are some more complicated parts of the MPA that apply to each situation. Legal advice regarding your specific situation should be sought to discuss:

The MPA allows spouses to come to whatever agreement they want; however, in order for an Agreement to be binding each spouse must understand the agreement. The Supreme Court of Canada and the MPA have both tackled the issues of formalities that are required to have a binding agreement. These formalities include that there is financial disclosure between the spouses (i.e.: each spouse gets to see all the documentation regarding the other person’s assets and debts); that the agreement is in writing; that both spouses sign formal acknowledgements as required under the MPA and that each spouse receive legal advice separate and apart from the other spouse and from a different, independent lawyer.

Common law spouses may not rely on the MPA. Whereas the starting presumption under the MPA is that spouses share assets equally, in a common law relationship the starting presumption is that each spouse is entitled to the assets in their own name, and responsible for the debts in their own name. Jointly held assets may be divided equally, or may require that each parties’ financial contribution to acquiring or maintaining the asset be taken into consideration.

In many situations a common law spouse may be entitled to a share of the other spouse’s assets under the legal doctrine of unjust enrichment, which is also sometimes referred to as constructive trust law. The law in this area is very fact specific and constantly evolving; however, the basic analysis starts with determining whether one spouse has benefited financially from the relationship, while the other spouse suffered a corresponding loss of financial position. If you think this type of law applies to you, be prepared to discuss with your lawyer all of the contributions of both spouses during the common law cohabitation.

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